This morning rare earths miner Lynas Corporation Ltd (ASX: LYC) told investors its Malaysian operating license will be renewed by September 3 but only under some tough conditions.
The license will be extended for just 6 months to mean the pressure is on management to obtain consent for a permanent disposal facility for some of the existing low-radioactivity rare earth mining waste created in Malaysia.
The company is also being slapped with a “toxic tax” of 0.5% of its gross sales to be deposited with the Malaysia government until it relocates its ‘cracking and leaching’ rare earth mining operations to Western Australia.
Once the transition is complete low-grade radioactive residue should no longer be an issue for the miner or its capricious Malaysian host.
Lynas has been regularly dragged over the coals by the Malaysian government for its environmental compliance failings, with the latest tax showing how the government is keen to take a cut of the rare earth mining spoils.
Separately, the former Malaysian government is principally known for being involved in the ‘world’s biggest fraud’ of all time, where around US$4.5 billion or more disappeared from government ‘1MDB’ accounts into private accounts.
The current Malaysian government is now leading the prosecutions relating to the disappearing funds.
This morning Lynas shares are down 2.6% to $2.61 and investors can expect volatility given the unpredictability of rare earth prices and its operating environment.
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The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.